1. Project Introduction

Arweave is a decentralized data storage solution that offers permanent and immutable data storage through its Blockweave technology and native cryptocurrency, AR token. Users can pay a one-time fee to store data permanently and earn rewards by contributing unused storage space.

Arweave functions by distributing information across a network of computers known as nodes or miners, differing from the traditional internet which is controlled by a few company servers that can crash or alter content at any time. Arweave supports a parallel internet called Permaweb through its extensive node network. These nodes make money by providing long-term storage of existing data and storing new data as requested by customers. Arweave uses its native AR cryptocurrency to operate the service; when people spend tokens to store data, they pay AR to miners, and a portion of AR is stored in a donation fund to ensure infinite permanent storage.

2. How it works

Arweave operates through an innovative data structure called Blockweave, which links each block to the previous one and a historical block (recall block). Miners must provide Proof of Access (PoA) before adding new blocks to ensure the integrity and immutability of all data. Users only need to pay a one-time fee for permanent data storage, with part of the fee covering initial storage costs and another part going into a donation fund for future storage costs. Simple Proof of Random Access (Spora) further enhances network efficiency and security. Bundling technology increases data upload efficiency and network performance by merging multiple transactions into one large transaction. Through these mechanisms, Arweave achieves a decentralized and permanent data storage network.

3. Core mechanism

3.1 Blockweave

Blockweave is the core data structure of Arweave, which improves the design of traditional blockchain and achieves efficient, reliable and permanent data storage. The following is a detailed analysis of blockweave.

3.1.1 Basic Structure

The main difference between blockweave and traditional blockchain is its link structure. Each block in a traditional blockchain is only linked to the previous block, while each block in blockweave is not only linked to the previous block (parent block), but also linked to a historical block (recall block) ). This double link structure increases the redundancy and security of data storage.

• Parent block: Like traditional blockchains, each block in the blockweave is linked to its immediate previous block, forming a basic chain structure.
• Recall block: Each block is also linked to a randomly selected historical block. This link is randomized to increase data redundancy and accessibility.

3.1.2 Data validation process

In blockweave, miners need to verify a randomly selected historical block before generating a new block. This verification mechanism is called Proof of Access (PoA). PoA ensures that all stored data blocks can be accessed and verified. In order to increase the chance of obtaining mining rewards, miners will store more historical data blocks, thus increasing the redundancy of the data.

• Random selection: By randomly selecting historical blocks for verification, it ensures that miners cannot foresee the specific data blocks that need to be verified, so a large amount of historical data must be stored.
• Data integrity: This mechanism ensures the integrity and non-tamperability of data and increases data security.

3.1.3 Data storage redundancy

The dual-link structure of blockweave greatly increases the redundancy of data. Since each block is linked to multiple blocks, even if some nodes fail or lose data, other nodes can still recover the data through redundant links. This design improves data durability and failure resistance.

• Multiple Links: Through the dual linking of parent blocks and recall blocks, data is stored in the network with a high degree of redundancy.
• Data Recovery: In the event of node failure or data loss, other nodes can use redundant links to restore data to ensure high data availability.

3.1.4 Blockweave’s construction and mining

Miners are rewarded for generating new blocks in the Arweave network. In order to generate new blocks, miners must be able to access and verify specified historical blocks. This mechanism incentivizes miners to store more historical data, improving the overall data storage capacity and security of the network.

• Mining process: Miners need to verify randomly selected historical blocks, generate new blocks and receive AR token rewards.
• Incentives: This mechanism encourages miners to store more data, increasing data redundancy and network security.

3.1.5 Data immutability and security

Since each block in the block weaving is linked to multiple blocks and is verified through the PoA mechanism, it is ensured that the data cannot be changed and deleted once stored. This immutability provides high security against malicious tampering or deletion of data.

• Immutability: Once data is stored in blockweave, it cannot be changed or deleted, ensuring data integrity.
• Security: Multiple links and random verification mechanisms improve data security and prevent malicious tampering.

3.2 Succinct Proofs of Random Access (Spora)

Succinct Proofs of Random Access (Spora) is a crucial consensus mechanism used by Arweave to enhance the efficiency and security of its network. By implementing Spora, Arweave ensures data integrity and security while improving the efficiency of data storage and access. Here is a detailed analysis of several key aspects of Spora:

3.2.1 Basic Principles

Spora (Succinct Proofs of Random Access) is an improved Proof of Access (PoA) mechanism. Its core idea is to validate new data blocks by randomly selecting historical data blocks, thereby ensuring the integrity and security of the data. This randomness reduces the potential for miner fraud while increasing the network’s security and data redundancy.

3.2.2 Data validation process

In Spora, miners need to verify a randomly selected historical data block before adding a new block. This random selection process makes it impossible for miners to foresee the specific data blocks that need to be verified, making it impossible to selectively store data. In this way, Spora ensures that miners have to store a large number of historical data blocks to increase their mining chances, thereby increasing the redundancy of the data and the overall security of the network.

3.2.3 Improve miners’ incentives

Spora enhances the incentives for miners. Since miners must store more historical data blocks to increase the probability of successful mining, this prompts them to invest more resources in storing and maintaining data. Miners not only receive mining rewards by verifying and storing data, but also increase their competitiveness in the network by increasing the amount of data stored.

3.2.4 Improvements in energy efficiency

Compared with the traditional Proof of Work (PoW) mechanism, Spora is more energy efficient. PoW requires miners to verify transactions through complex calculations, which results in a large amount of energy consumption. Spora greatly reduces the consumption of computing resources by randomly accessing and verifying historical data blocks, thereby improving the energy efficiency of the network. This efficient verification process not only reduces energy costs but also reduces environmental impact.

3.2.5 Security and attack resistance

Spora enhances the security and attack resistance of the network through its randomness and data redundancy. Since miners cannot predict which data blocks need to be verified, this makes it difficult for malicious attackers to conduct targeted attacks. Additionally, the large number of historical data blocks stored by miners also increases the amount of data an attacker needs to compromise, thereby increasing the overall security of the network.

3.3 Bundling

Arweave’s bundling technology is one of its key innovations to improve data upload efficiency and network scalability. Through this technology, Arweave can effectively handle large-scale data uploads, improving user experience and network performance. The following is a detailed analysis of bundling technology:

3.3.1 Basic Principles

The core idea of ​​bundling technology is to merge multiple small transactions into one large transaction, and then upload this large transaction to Blockweave. This method reduces frequent upload operations for a single transaction, thereby reducing network congestion and improving the efficiency of data transmission.

3.3.2 Improved data upload efficiency

Without bundling technology, each upload transaction needs to be processed and recorded separately, which not only increases the burden on the blockchain but also leads to inefficiency in the data upload process. Through bundling technology, multiple small transactions are uploaded after they are packaged into one large transaction, which reduces the number of transactions on the chain and greatly improves the efficiency of data uploading.

3.3.3 Network scalability

Bundling technology significantly increases the scalability of the Arweave network. In large-scale data upload scenarios, such as non-fungible token (NFT) projects, media file storage, etc., bundling technology can effectively handle a large number of concurrent upload requests, avoiding network congestion and performance bottlenecks. For example, Arweave successfully uploaded 47GB of data in one bundling operation, which is difficult to achieve with traditional on-chain data storage solutions.

3.3.4 Transaction finality and developer experience

Through bundling technology, developers and users can know the results of data uploading with more certainty, because the success rate of uploading large transactions is higher than the success rate of uploading multiple small transactions separately. This certainty improves the developer experience, allowing them to focus more on application development without having to worry about the complexity of underlying data storage.

3.3.5 Cost-effectiveness

Bundling technology not only improves the efficiency of data upload, but also brings significant cost benefits. In the traditional on-chain data storage model, each transaction requires a fee payment, while bundling technology reduces the number of transactions by merging transactions, thereby reducing the overall transaction cost. This is an important advantage for users who need to store large amounts of data.

3.3.6 Data integrity and security

Bundling technology ensures data integrity and security. Although multiple transactions are merged into one large transaction, the data of each small transaction remains intact and cannot be tampered with. In this way, even if there is a problem during the upload process, the security and integrity of the data can be ensured by repackaging and uploading.

3.4 Wildfire mechanism

Wildfire is an incentive mechanism within the Arweave network designed to improve the overall user experience by optimizing data dissemination and improving network performance. Here is a detailed analysis of Wildfire mechanics:

3.4.1 Basic principles

The Wildfire mechanism uses a ranking system to incentivize nodes to respond quickly and satisfy data requests. Nodes are ranked based on how quickly and efficiently they spread data across the network, with higher-ranked nodes receiving more requests and rewards. This mechanism ensures rapid distribution of data in the network and improves the overall performance of the network.

3.4.2 Data transmission efficiency

The core of the Wildfire mechanism is to improve the efficiency of data dissemination. After a node receives new data in the network, it propagates it to other nodes as quickly as possible. Nodes with fast propagation speed and quick response will have an advantage in the ranking, thereby obtaining more request processing opportunities and corresponding rewards.

• Spread quickly: After receiving new data, a node quickly propagates it to other nodes to ensure the rapid flow of data in the network.
• Efficiency first: Through the ranking mechanism, nodes are encouraged to optimize data dissemination efficiency and improve the overall performance of the network.

3.4.3 Node ranking system

The Wildfire mechanism motivates nodes to improve data dissemination efficiency by ranking node performance. The ranking system scores nodes based on how quickly and reliably they respond to data requests. Nodes with high scores enjoy higher priority in the network and receive more request processing opportunities and rewards.

• Responding speed: The speed at which a node responds to data requests is an important indicator of ranking. The faster the speed, the higher the ranking.
• Data reliability: The reliability of data provided by nodes is also a key factor in ranking. The more stable the data provided, the higher the ranking.

3.4.4 Incentive and reward mechanisms

The Wildfire motivates nodes to improve data dissemination efficiency by rewarding high-ranking nodes. Nodes gain higher rankings and more rewards by disseminating data quickly and reliably. This reward mechanism ensures the active participation of nodes in the network, improving the overall performance of the network and the availability of data.

• Ranking rewards: High-ranking nodes get more request processing opportunities and corresponding rewards.
• Financial incentives: Nodes obtain economic returns by providing fast and reliable data dissemination services, motivating nodes to continuously optimize performance.

3.4.5 Network health and robustness

The Wildfire mechanism not only improves the efficiency of data dissemination but also enhances the health and robustness of the network. By motivating nodes to respond and disseminate data quickly, the Wildfire mechanism ensures the stability and efficient operation of the network under high load and high demand conditions.

• High load adaptation: Under high load conditions, the Wildfire mechanism ensures that data can be quickly and efficiently spread across the network.
• Improved robustness: By optimizing node performance, the Wildfire mechanism enhances the overall robustness and reliability of the network.

4. AR Token

The AR token is the native cryptocurrency in the Arweave network and plays several key roles, from incentivizing miners to paying for data storage to maintaining the economic balance of the entire ecosystem.

Here is a detailed analysis of AR tokens:

4.1 Basic functions of AR tokens

• Pay for data storage: When users store data on the Arweave network, they need to pay a one-time storage fee using AR tokens. These fees guarantee the permanent storage of data.
• Incentivize miners: Miners get AR tokens by storing and verifying data. This mechanism encourages miners to actively participate in data storage and maintenance, ensuring the security and reliability of the network.

4.2 One-time payment model

Arweave’s business model differs from traditional subscription services because users pay a one-time fee to store data permanently. Part of these fees is used to cover initial storage costs, and another part goes into an endowment fund for future storage costs.

• Initial storage cost: The fee paid immediately covers the initial storage and access of the data.

• Endowment fund: About 86% of fees go into an endowment fund, which is used to incentivize miners long-term and ensure data durability.

  4.3 Endowment Fund

Endowments are designed similarly to traditional financial endowment structures to cover future storage costs through interest and appreciation. The interest generated from the initial fee paid by the user is used to pay for the long-term storage costs of the miners, ensuring that the data can be stored permanently.

• Principle: The funds and interest accumulated in the endowment ensure that miners receive ongoing financial incentives for years to come.

• Cost reduction expected: With data storage costs expected to continue to fall, interest income from endowments will be enough to cover long-term storage expenses.

  4.4 Token supply

• Initial supply: 66 million AR tokens.
• Circulating supply: 55 million AR tokens

• Gradually halved: Similar to Bitcoin’s halving mechanism, ensuring the scarcity and long-term value of the token supply. But what is different is that the AR token adopts a gradual halving mechanism, which means that the issuance of the token will gradually decrease in each small cycle.

  4.5 AR Token Distribution

• Seed sales: 9%.
• Private sale: 13.42%.
• Initial Public Offering: (ICO): 3.75%.
• Strategic partners: 5.42%.
• Consultants: 2.42%.
• Team: 10.83%.
• Technology startups: 0.5%.
• Adoption incentives: 15.92%.
• Project: 22.07%.
• Mining reward: 16.67%.

4.6 Economic incentives for tokens

AR tokens incentivize network participants in a variety of ways:

• Miner rewards: Miners get AR token rewards by storing and verifying data, increasing their participation enthusiasm.
• User pays: Users pay AR tokens to store data, ensuring their data is preserved forever.
• Revenue sharing: Arweave introduces Profit Sharing Tokens (PST). Developers can obtain tiny dividends by building and operating applications to promote the development and innovation of the ecosystem.

4.7 Market Performance of Tokens

The performance of AR tokens in the market is affected by a variety of factors, including increased storage demand, ecosystem development, and market recognition of decentralized storage solutions. The value of AR tokens increases as the network grows and user demand increases.

• Market demand: As the Arweave network grows and user demand increases, the market value of AR tokens increases accordingly.
• Ecosystem development: More developers and projects join the Arweave ecosystem, driving the demand and value of AR tokens.

As of now, the market performance of AR tokens is as follows:

• Price: $46.83, increased by 16.10% in the last 7 days.
• Market value: $3,065,146,793, decreased by 2.26% recently.
• 24 hour trading volume: $172,123,630, increased by 104.49% recently.
• Trading volume/market capitalization ratio: 5.38%
• Circulating supply: 65,454,185 AR, accounting for 99.17% of the total supply.
• FDV: $3,090,706,704

5. Team/Partnership/Financing situation

5.1 Team

Arweave is a decentralized data storage protocol whose core team consists of experienced technical experts and industry leaders. Founder and CEO Sam Williams graduated from the University of Nottingham and has a strong background in blockchain technology. Chief Operating Officer (COO) Sebastian Campos Groth graduated from Georgetown University and worked at Techstars, responsible for the daily operations of the project. Legal Director Giti Said is a graduate of the University of Vienna and handles legal matters. The team also includes multiple technical and business experts, such as Richard Pardoe, co-founder of Liquity, and Andy Bell, head of engineering at Movement Labs, who work together to drive Arweave’s growth and innovation.

5.2 Partnership

1. KYVE

• Introduction: KYVE is a blockchain storage middleware built on Arweave, providing a standardized verification and archiving framework.
• Highlights:

KYVE mainnet launched, with over 2000 TB of data uploaded. KYVE has strategic partnerships with 19 projects and plans to host community growth events in 2024.

1. Irys (formerly Bundlr)

• Introduction: Irys is a scaling solution for Arweave that increases Arweave’s permanent data throughput through bundled transactions.
• Highlights:

In September 2023, Irys processed 1 billion transactions. In October 2023, Irys partnered with Solana Mobile to store DApp Store applications.

1. ArDrive

• Introduction: ArDrive is a decentralized cloud storage application similar to Web3’s Dropbox or Google Drive.
• Highlights:

In February 2023, ArDrive became fully decentralized and stored on Arweave. In May 2023, ArDrive 2.0 was launched, adding dark mode, wallet generation and large file upload functions.

5.3 Financing situation

Since its establishment, Arweave has successfully raised US$37.3 million in funding through multiple rounds of financing. Major investors include Andreessen Horowitz (a16z), Union Square Ventures, Multicoin Capital, Coinbase Ventures and other well-known institutions. Here are some of the major financing events:

1. Seed round financing

• Time: 2017
• Amount: US$5 million
• Major investors: Andreessen Horowitz（a16z）

1. Private equity

• Time: 2019
• Amount: US$8.3 million
• Major investors: Multicoin Capital, Union Square Ventures, a16z, Coinbase Ventures, and Arrington XRP Capital

1. Initial Public Offering (ICO)

• Time: 2018
• Amount: US$15.7 million
• Details: Through a public sale conducted via an Initial Coin Offering (ICO), Arweave attracted a large number of early investors.

1. Subsequent financing

• Time: 2020
• Amount: US$8.3 million
• Major investors: Andreessen Horowitz(a16z), Union Square Ventures, Coinbase Ventures

1. Latest financing

• Time: 2023
• Amount: US$8.3 million
• Major investors: a16z, Coinbase Ventures, Multicoin Capital

6. Project evaluation

6.1 Sector analysis

Arweave belongs to one part of the decentralized data storage field. It realizes the function of permanently storing data through its innovative blockweave technology. The core goal of the project is to provide an efficient, secure and scalable data storage solution that enables data to be stored permanently and cannot be tampered with. Here are some decentralized data storage projects similar to Arweave:

1. Filecoin

• Filecoin is a decentralized storage network that leverages IPFS (InterPlanetary File System) technology and drives storage nodes through an economic incentive mechanism.
• Core Technology: Proof of Replication and Proof of Spacetime.
• Features: Users pay storage fees on demand, supporting large-scale data storage and retrieval.

1. Siacoin

• Introduction: Siacoin is a decentralized storage platform that achieves secure and low-cost data storage through blockchain technology.
• Core Technology: Smart contracts and proof of storage.
• Features: Users pay Siacoin tokens to rent storage space, providing a low-cost distributed storage solution.

1. History

• Introduction: Storj is a decentralized cloud storage platform based on blockchain, which allows users to store data through a distributed network.
• Core Technology: Sharding technology and distributed hash table (DHT).
• Features: Data is shared, encrypted and stored on nodes around the world to ensure data security and privacy.

6.2 Project Advantages

1. Permanent storage: Users only need to pay a one-time fee to store data permanently on the Permaweb, without the need for monthly subscription fees.
2. Decentralization: Data is stored in a decentralized manner, reducing the risk of reliance on centralized servers.
3. Strong support: Arweave has backing from renowned investors, including a16z, Coinbase Ventures, and Union Square Ventures.
4. Widely used: It is used as the default metadata storage platform by OpenSea and Solana’s NFT project Metaplex, ensuring the long-term validity of NFT data.

6.3 Disadvantages

1. High initial cost

• One-time Payment: While Arweave’s one-time payment model ensures permanent storage, the initial cost might be higher compared to a pay-as-you-go model. This could create financial pressure for some users, particularly small businesses or individual users.
• Cost Transparency: The one-time payment fee structure might be less transparent than a pay-as-you-go model. Users need to have a comprehensive understanding of the fee structure before deciding to use Arweave.

1. Insufficient network effects

• User and developer appeal: Although Arweave’s technical advantages are obvious, its user and developer ecosystem is still developing and may not be attractive enough compared with some mature decentralized storage projects.
• Market awareness: Arweave’s market awareness may not be high enough compared to competitors such as Filecoin, and more marketing and community building are needed to increase its popularity and user base.

1. Technology and Development Challenges

• Development complexity: Arweave’s blockweave and other technologies may be somewhat complex for developers, and developers need to invest more learning costs to understand and apply these technologies.
• Technical bottleneck: Although Arweave provides efficient storage solutions, it may still encounter technical bottlenecks when facing large-scale data storage and processing, requiring continuous technical improvement and optimization.

1. Conclusion

As an innovator in the decentralized data storage field, Arweave achieves permanent data storage and efficient management through its unique Blockweave technology and robust economic incentive mechanism. Its one-time payment and permanent storage business model not only addresses the issues of data loss and high costs in traditional storage systems but also provides users with a reliable and long-term data storage solution. Although Arweave still faces some challenges in technology and market promotion, its continually expanding ecosystem and diverse partnerships have laid a solid foundation for its growth. With the ongoing advancement of blockchain technology and the increasing demand for decentralized storage, Arweave is poised to become a leader in this field, offering more secure, transparent, and efficient data storage services to users worldwide. Through continuous technological innovation and market expansion, Arweave is steadily progressing towards its goal of becoming the world’s leading provider of decentralized storage solutions.

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1. This article originally titled “Arweave：一次支付，数据永存” is reproduced from [BlockChainTeaHouse]. All copyrights belong to the original author [茶馆小二儿]. If you have any objection to the reprint, please contact the Gate Learn team, the team will handle it as soon as possible.

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